China names new top economic officials

Updated 2017-02-27 08:55:29Global Times

Reforms tougher as economy enters 'new normal' : expert

Changes to the top positions at China's three main economic departments before the 19th National Congress of the Communist Party of China (CPC) will build a new core team to deal with tougher challenges to economic reforms in the future, experts said.

He Lifeng was appointed director of the National Development and Reform Commission (NDRC), replacing Xu Shaoshi, which was announced at the close of the National People's Congress Standing Committee meeting on Friday, the Xinhua News Agency reported.

Meanwhile, Zhong Shan replaced Gao Hucheng as Commerce Minister at the Ministry of Commerce (MOFCOM), China's top legislature said Friday.

Guo Shuqing, previously governor of East China's Shandong Province, was named to head the China Banking Regulatory Commission (CBRC) on Friday, the Beijing Youth Daily reported on Saturday.

The NDRC, MOFCOM and the CBRC are responsible for China's economic growth, foreign trade and banking system, respectively, and the reshuffle is critical for China's economic rejuvenation in the next few years, Gao Liankui, research program director of China and World Economic Governance at the Renmin University of China, told the Global Times on Sunday.

Experts also noted that the tasksfor the heads of the three ministries will be tougher, especially as China's economy enters a "new normal" period.

Exploring new growth engines

Born in South China's Guangdong Province in 1955, He had served as a member of the provincial standing committee of East China's Fujian Province and Chairman of the People's Political Consultative Conference of North China's Tianjin Municipality until he joined the NDRC as vice chief in 2014, said the NDRC's website.

He was in charge of the group which promoted the Belt and Road initiative since it was proposed, said Beijing-based financial news website eeo.com.cn on Saturday.

One of He's priorities is to "explore new engines to drive domestic economic growth," Bai Ming, a research fellow at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Sunday.

Last year, the country's robust real estate market had a major impact on GDP growth.

"But this is not a sustainable development model, so the NDRC is expected to coordinate policies in consumption, industry and investment to optimize the economic structure and nurture new growth areas," Bai said.

Foreign trade challenges

Although China's trade volume registered a higher-than-expected increase in January, the US overtook China as the world's largest trader in 2016, posing a big challenge to Zhong, experts warned.

Zhong, 62, was vice governor of East China's Zhejiang Province and has served at MOFCOM since 2008, according to the ministry's website.

At MOFCOM, Zhong was involved in many important foreign trade negotiations, and was key in promoting cooperation with regional countries of the Belt and Road initiative, said the financial news site 21jingji.com on Saturday.

China is losing its traditional advantage in foreign trade to Southeast Asian countries due to the surge in production costs, such as labor and land, which has led to the country's shrinking exports, Bai noted.

However, "new comparative advantages in high-end industries have yet to be developed to compete with advanced foreign rivals," Bai said.

Bai noted that MOFCOM is supposed to step up efforts to address the issue.

Meanwhile, as trade protectionism has risen amid sluggish global growth and uncertainties brought about by US President Donald Trump's administration, China's foreign trade is likely to face increasing friction in the near future, Gao said.

"And MOFCOM should be prepared for it," Gao said.

Curbing risky loans

Bai also predicted that Guo, the head of China's banking regulator, is likely to implement policies to prevent potential financial risks and bubbles, as China's banking system - with total assets of trillion - is plagued with excessive debt and soaring non-performing loans.

Guo, 61, served as China Securities Regulatory Commission chairman for 18 months before being appointed vice secretary of the Shandong provincial committee of the Communist Party of China in March 2013, according to Xinhua.

The Inner Mongolia Autonomous Region native served as chairman of the China Construction Bank between March 2005 and October 2011. He was praised as a "philosopher of finance" and a "reformer" by finance industry insiders, said the Beijing Youth Daily.

Guo is expected to deal with off-the-balance lending and massive shadow banking activities in the banking sector, which remains largely unregulated, experts said.

It is estimated that wealth-management products issued by banks in China in 2016, which include investments in bonds and risky loans, surged 30 percent from the previous year to 26 trillion yuan, Bloomberg reported.